Yahoo! moving towards dividend, shares dip 4.1%

Yahoo! Inc dropped the most in three weeks, as the company is leaning towards selling its Asian assets and redistributing the proceeds to shareholders, rather than selling itself to a group of buyers.

This scenario is emerging as the most likely option for Yahoo! and would let the internet company eventually pay a special dividend or buy back shares, according to five people familiar with the situation, who declined to be identified because the talks are private.

The shares declined 4.1 per cent to $15.89 at 9:36 am New York time, the biggest intraday drop since October 6. Before on Monday, the stock had surged 28 per cent since the company fired chief executive officer Carol Bartz in early September, making it a more expensive target for private-equity buyers, the people said last week.

Yahoo! has been exploring options while searching for a replacement for Bartz, who struggled to boost revenue growth and fend off competition from Google Inc and Facebook Inc. Co-founder Jerry Yang said on October 20 the company wasn’t necessarily on the block.

“The intent going in is not to put ourselves up for sale,” Yang had said at the All Things Digital Asia conference in Hong Kong. “The intent is to look at all options. There’s plenty of options for the board, and plenty of options for our shareholders to realise value.”

No decision has been made yet and Yahoo! could still sell to a group of investors, the people said. Yahoo! may also sell a minority stake in the company, or seek a buyer for the entire company after finding buyers for Asian assets, said the people. A change of ownership entirely would put the tax-efficiency of the Asian asset deals at risk, one of the people said.

Dana Lengkeek, a spokeswoman for Sunnyvale, California-based Yahoo!, declined to comment.

“Multiple parties” have expressed interest in Yahoo!, according to a September memo by Yang. KKR & Co and Blackstone Group LP are among the private-equity firms considering possible bids for Yahoo!, people with knowledge of the matter have said.